Help to Buy ISA transfer to
Lifetime ISA explained

Saving up as a first-time buyer can be tough. Finding ways to kick-start your saving is key. Fortunately, the government are here to help by offering two different types of savings accounts to help: the Help to Buy ISA, and the Lifetime ISA.

What's the difference between a Help to Buy and a Lifetime ISA?

What's the difference between a Help to Buy and a Lifetime ISA?

The Help to Buy ISA and Lifetime ISA are types of individual savings accounts introduced by the government to help first-time buyers get on the property ladder. You can only use either a Help to Buy ISA or a Lifetime ISA for first time house purchase, not both.

The Help to Buy ISA was launched in December 2015 and the Lifetime ISA launched in April 2017. The Help to Buy ISA is being withdrawn, with new account openings only available until 30th November 2019. However, you can pay into a Help to Buy ISA until 2029.

The Lifetime ISA also has the added feature of being able to be used for retirement saving as well.

Lifetime ISA

  • Can be opened by UK residents aged 18-39.
  • Maximum contribution of £4,000 a year based on 2018/19 limits.
  • Contributions can be made in regular payments or lump sums.
  • Bonus applied to your Lifetime ISA account on a monthly basis, based on the amount paid in.
  • The bonus can be used at exchange or completion for your first home.
  • Can invest in either a cash or stocks and shares
  • First home purchase price of £450,000 or less.
  • Lifetime ISA must be opened for 12 months before you can withdraw money for your first home.
  • Can be used to save for a first home, for retirement or for one then the other.

Help to Buy ISA

  • Can be opened by UK residents over the age of 16 wanting to save for their first home
  • Optional monthly payments of up to £200 can be made, while a lump sum deposit of up to £1,200 can be made when opening the account. 
  • Once it is certain the transaction will go ahead, your solicitor/conveyancer will claim the bonus between exchange and completion. The government bonus contributes towards your overall deposit. 
  • Can only be held as a cash savings ISA
  • First home purchase price of £250,000 or less (£450,000 or less in London only).
  • Money can be used for first home purchase once you have £1,600 saved (3 months saving full allowance).
  • Can only be used for the purchase of your first home.

Please note, with stocks and shares investments your capital is at risk. Whilst cash can be more secure than stocks and shares, the value can be eroded by the effects of inflation.

Can I transfer the balance of my Help to Buy ISA into a Lifetime ISA?

Yes, we accept transfers from a Help to Buy ISA into our Lifetime ISA. A OneFamily Lifetime ISA invests in stocks and shares, we do not offer a cash Lifetime ISA. Help to buy ISAs are cash, not stocks and shares investments.

Things to consider:

  • You can take out a Help to Buy ISA any age from age 16, however the Lifetime ISA is only available to those aged between 18-39. So if you’re looking to transfer but are aged 16 or 17, or indeed over the age of 39 you won’t be able to.
  • You need to have held your Lifetime ISA for a year before you can use it to purchase your first home. So if you are planning to buy your first home within a year, transferring from a Help to Buy ISA to a Lifetime ISA will impose an additional restriction on you.
  • If you choose to invest in a stocks and shares Lifetime ISA, please note that investments of this nature don't offer the same security as cash. Investments in stocks and shares can fall as well as rise so this may mean you could get back less than you paid in.
  • A withdrawal to purchase your first home before the Lifetime ISA has been open for 12 months will result in a 25% government withdrawal charge.

Please note: As with all stocks and shares investments your capital is at risk. Also, if you have savings this could affect your entitlement to means tested benefits. If using a Lifetime ISA to save towards your retirement, in place of a pension, you could lose out on valuable employer contributions.

Not sure about transferring?

  • Vouchedfor.co.uk - Independent financial advice: If you’re not sure if transferring your Help to Buy ISA to a Lifetime ISA is right for you, it’s worth speaking to an independent financial adviser.
  • Money Saving Expert: Martin Lewis and Helen Saxon take a look in detail at the Lifetime ISA and Help to Buy ISA to attempt to give first-time buyers a comprehensive explanation of how both ISAs work.

Transfer to a Lifetime ISA

Interested in transferring your Help to Buy ISA to a Lifetime ISA today?
Download the transfer form and complete the online application today.

Before opening your Lifetime ISA please ensure you have read all key documentation.

Find out more